My property client with the three House of Fraser stores calls me. His voice betrays a mixture of anger and panic. “They’ve told me they want to stay but they’re not going to pay any rent, just the business rates,” he says.
“Yikes,” I reply. “You’re damned if you do and damned if you don’t. Either your valuation takes a big hit or you tell them you’re not interested in the deal, they close the store, people lose their jobs and we get accused of being a heartless landlord.”
These types of situations are a nightmare for the unloved property industry. The House of Fraser brand and jobs will always get the public’s sympathy. My colleague Hugo, who was on the call with the HoF client, points to the impending Aston Martin IPO. “The company’s been bankrupt seven times, but is now heading for a £5bn valuation. If one of our guys went bust just once, he’d struggle to come back.”
What to do with HoFgate? Fight back or concede and try to claim a few crumbs of the PR spoils for keeping the store open?
I grab my Burberry ‘Amberford’ trench coat and head out for a coffee, passing a new office block that has just been leased by WeWork.
What if WeWork went into administration, I wonder, and was picked up by Mike Ashley for a few pounds and he told every WeWork landlord he would keep the operation going on the same terms as HoF – ie no rental payment, just the business rates. Surely, it couldn’t happen.